Calcutta High Court (Appellete Side)
State Of West Bengal vs Shiladitya Banerjee &Ors on 2 December, 2024
Author: Harish Tandon
Bench: Harish Tandon
1
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE JURISDICTION
APPELLATE SIDE
Present:
THE HON'BLE JUSTICE HARISH TANDON
&
THE HON'BLE JUSTICE PRASENJIT BISWAS
FA 195 of 2004
with
COT 1045 of 2005
State of West Bengal
Vs.
Shiladitya Banerjee &Ors.
Appearance:
For the Appellant : Mr. Md. Galib, Adv.
Mr. Ramchandra Guchhait, Adv.
For the Respondent : Mr. Sabyasachi Sen, Adv.
Mr. Supratim Dhar, Adv.
For the Respondent No. 3 : Mr. Pranit Bag, Adv.
: Mr. Ramanuj Ray Chaudhury, Adv.
Ms. Mayuri Ghosh, Adv.
Judgment on : 02.12.2024
Harish Tandon , J.
The instant appeal arises from a judgment dated 17th August, 2001
passed by the learned Additional Special Land Acquisition Judge at Alipore,
South 24-Parganas in LRA case No. 177 of 1999 (V) at the behest of the
State.
2
At the very outset, we must record that both the parties agree to argue
the matter on the basis of the evidence and the documents included in the
paper book as well as deduced from the impugned judgment in absence of
the Reference Court record having brought to this Court.
The facts are more or less undisputed but the parties are at variance
on the determination of a market value of the acquired land and the rent
compensation awarded by the Reference Court. Admittedly, the land in
question was owned and possessed by the respondents by way of
inheritance which was requisitioned by the State and the possession was
taken on 5th May, 1976 under Section 3 (1) of the West Bengal Land
(Requisition and Acquisition) Act, 1948 commonly known as Act II of 1948.
The land in question is situated in a prime locality of Kolkata under the
territorial jurisdiction of the Kolkata Municipal Corporation comprised in
23Cottahs 8 Chittacks 25 Sq.ft. of land having allotted a Premises No. 96,
Narkel Danga Main Road, Kolkata.
Subsequently, a Notification under Section 4 (1) of Act II of 1948 was
issued on 16th March, 1994 followed by a declaration as the said
requisitioned land is further required for larger public interest i.e., for the
purpose of providing accommodation to the pavement hawkers. The Land
Acquisition Collector passed an award on 28th February, 1997 determining
the market value of the land as on the date of such notification under
Section 4 (3) of the said Act at Rs. 37,12,643/- per acre i.e., Rs. 61,366/-
per Cottah together with 30% solatium per annum and a rent compensation
at the rate of 6% per annum on the land value from the date of possession
i.e., 5th May, 1976 to the date of notification under Section 4 (1) of the said
3
Act i.e., 02.06.1994 with further interest at the rate of 15% per annum from
03.06.1990 to 02.09.1996.
The respondents did not agree the market value as determined by the
land acquisition collector and prayed for a reference under Section 8 of the
said Act read with Section 18 of the Land Acquisition Act, 1894. The matter
was sent to the Reference Court and by the impugned order, the Reference
Court has determined the market value of the land as on the date of
notification under Section 4 (1) of the said Act at Rs. 2,50,000/- per cottah
together with 30% solatium per annum and the rent compensation was
enhanced from 6% to 9% per annum from the date of the possession till the
publication of said notification and further awarded 9% interest per annum
for the first year from the date of publication of notice and 15% per annum
from 3rd June, 1994 till the entire compensation is paid.
The appellant has filed the instant appeal assailing the order of the
Reference Court in enhancing the market value of the acquired property and
also the other component namely, the rent compensation at the rate of 6%
per annum. On the other hand, the respondents have filed the cross-
objection assailing the findings of the Reference Court on the market price of
the land as well as the rent compensation and both the appeal and cross-
objection are taken up together for final disposal.
The counsel for the appellant submits that the Reference Court
wrongly proceeded to determine the market value on the basis of an
agreement for sale which was executed in the year 1987 by allowing an
appreciation of 65% for the time lag which is impermissible. It is further
submitted that the other agreement of sale which was executed on 30th
4
April, 1993 was also taken into consideration for ascertaining the market
value which cannot be said to be a safe mode as the parities may not
ultimately execute the sale deed and may resile from the contract. It is
further submitted that the Reference Court did not take into consideration
the award dated 07.01.1988 of the Reference Court in respect of a premises
No. 14A, Beliaghata Main Road, Kolkata which is situated in a short
distance. It is thus, submitted that the same can be taken as a best market
price prevalent as on 1988 and there is no infirmity in applying the
appreciation for the time lag in arriving at the market price of the land as on
the date of the notification. It is vehemently submitted that the rate report
prepared by the surveyor-cum-valuer of the Office of the Land Acquisition
Collector has not been taken into consideration which is more exhaustive
and reliable piece of evidence. It is further submitted that the Reference
Court has wrongly awarded 9 per cent per annum as rent compensation on
the entire value of the land which is too excessive. In furtherance thereof, it
is submitted that the rate report took into account the 6 per cent per annum
rent compensation which is reasonable and in absence of any further
findings returned thereupon the order of the Reference Court suffers from
infirmity and illegality. Lastly, it is submitted that the award for
compensation at the rate of 9 per cent per annum for first year from the date
of publication of notification and after expiration of an year at the rate of
15% per annum is not applicable in case of acquisition made under Act II of
1948 though there is a provision for the same under the Land Acquisition
Act, 1894. It is thus, submitted that the order of the Reference Court
warrants interference and is liable to be set aside.
5
On the other hand, the counsel for the respondents submits that the
reliance was placed upon two sale deeds [Exhibit-1 and Exhibit-1(a)]
wherein the Exhibit-1 is relatable to a neighbouring land which was sold at
a price of Rs. 7, 59,000/- per cottah on November 28, 1987 whereas the
Exhibit – 1(a) relates to an adjacent land sold on April 30, 1993 wherein the
consideration price was shown at Rs. 6,53,000/- per cottah and therefore,
the Reference Court has wrongly determined the market price at Rs.
2,50,000/- per cottah. It is submitted that the Reference Court cannot
surreptitiously jumped to a conclusion that the market price is Rs.
2,50,000/- per cottah which is apparently inconsistent with the market
price shown in the exemplars relating to a neighbouring/adjacent land. It is
further submitted that taking into account the depreciation and the other
components on the basis of the aforesaid exemplars the market value could
not have been less than Rs. 5,00,000/- per cottah and therefore, the finding
of the Reference Court in this regard is required to be interfered with. The
counsel for the respondents submits that though there is some
discrepancies over the Exhibit-1 and 1(a) so far as its nature is concerned
yet there is no impediment on the part of the Court to take into account the
consideration price shown in the agreement for sale and placed reliance
upon a judgment of the Apex Court in Mandal Revenue Officer & Anr.
C.R. Bhagwanth Rao & Ors., reported in (2005) 10 SCC 478. It is
further submitted that in order to determine the market value of the
acquired land on the date of the notification the safest course to adopt in
such case is the price which the willing bona fide purchaser paid to the
willing bona fide seller and relied upon a judgment of the Apex Court in case
6
of Jawajee Nagnatham vs. Revenue Divisional Officer, Adilabad, A.P. &
Ors., reported in (1994) 4 SCC 595. It is thus, submitted that the
appreciation by 10 per cent per annum should have been adopted in order
to ascertain the market value on the basis of exemplars executed at prior
period of time and therefore, the contention of the appellant in this regard is
untenable. It is thus submitted that there is no difficulty in applying the
provisions contained in Act I of 1894 in awarding statutory
interest/compensation even in a case where the acquisition is initiated
under Act II of 1948 and therefore there is no incongruity and/or infirmity
in the judgment passed by the Reference Court.
At the very outset, we must record that in support of the aforesaid
contention the parties have relied upon a several judgments which we will
deal with in seriatim in pursuit of its applicability in the facts of the instant
case.
In Special Land Acquisition Officer, BTDA Bagalkot vs. Mohd.
Hanif Sahib Bawa Sahib, reported in (2002) 3 SCC 688 the Apex Court
granted the appreciation of 10 per cent for every subsequent year in
determining the market price of the land as on the date of notification under
Section 4 of the Act. In the given case, no evidence was produced by the
parties nor any comparable sale transactions were tendered in evidence to
prove the market value as on the date of notification. The reliance appears
to have been made on a notification issued under Section 4 of the Act and
the judgment rendered in the land acquisition case which was later on
confirmed by the High Court determining the market price as on the date of
the statutory notification issued several years before. The facts discerned
7
from the finding of the said report would reveal that the base market value
of the land was taken on the basis of the determination made in the another
land acquisition case and allowed the 10 per cent appreciation every year
because of the development activities undertaken for establishing a new
township as the old township was submerged in water. In the backdrop of
the aforementioned factual matrix it was held:
“15. In these appeals the land was acquired by issuing a notification
under Section 4 dated 22-8-1991, for a public purpose, namely, the
formation of link road to the new town, Bagalkot township. It is not
disputed that the land under acquisition is adjacent to the land in
Civil Appeal No. 12515 of 1996 and other connected cases. The
potential value of the land under acquisition in these appeals is the
same as in the earlier cases. The Reference Court granted an
appreciation of 10 % for every subsequent year, taking the base price
at Rs. 5.50 per sqft fixed for acquisition of the land in the year 1985,
as in the earlier cases, at the rate of 10% in the value of the land for
every subsequent year. As the earlier acquisition was of 1985 and
this acquisition is of the year 1991, appreciation for six years was
granted. The Reference Court determined the payable market value at
Rs. 7 per spft, which was later confirmed by the High Court. In
addition, statutory benefits of solatium and interest etc. were also
granted. In the earlier notification for the year 1985 we have fixed
the market value of the land for the year 1985 at Rs. 5 per sq ft. On
giving an appreciation of 10% in the value of the land for every
subsequent year for a period of six years the value of the land would
come to Rs. 8 per sq ft. The claimants have not filed either cross-
8appeals or cross-objections. The overall value of Rs. 7 per sqft fixed by
the Reference Court and confirmed by the High Court is thus
reasonable and does not call for any interference.”
The judgment of the Apex Court in Patel Joitaram Kalidas & Ors.
vs. Spl. Land Acquisition Officer & Anr., reported in (2007) 2 SCC 341
is cited for the proposition that even if the claimant have not filed a separate
appeal or cross-objection, it is a duty of the court to award statutory
interests and the procedural hassles may not come in the way of rendering
complete justice. Though there is no reference of any provision of the
statute yet, the same can be traced from the provisions contained under
Order 41 Rule 33 of the Code of Civil Procedure for the simple reason that
the statutory entitlement sees no barrier as it is a primary duty of the Court
to grant relief which a litigant is entitled to in the following:
“15. After noticing the findings of the High Court this Court held that
on a reference under Section 18 of the Act the parties go to trial
primarily for the determination of market value of the land. So far as
award of interest is concerned, it is never an issue between the
parties. Once, the conditions under Section 28 or Section 34 of the
Act are satisfied the award of interest is consequential and
automatic. This Court went on to observe: (Shree Vijay Cotton & Oil
Mills Ltd. case, SCC p.269, para 14)
’14. The High Court while appreciating the point in issue did
not consider the mandatory provisions of Section 34 of the Act.
The said section specifically provides that when the amount of
compensation is not paid on or before taking possession of the
9land the Collector shall pay interest at 6 per cent per annum for
the date of taking over possession. The payment of interest is
not dependent on any claim by the person whose land has been
acquired. There can be no controversy or any lis between the
parties regarding payment of interest. When once the
provisions of Section 34 are attracted it is obligatory for the
Collector to pay the interest. If he fails to do so the same can be
claimed from the Court in proceedings under Section 18 of the
Act or even from the appellate court/courts thereafter.’
This Court also observed: (Shree Vijay Cotton & Oil Mills Ltd. case, SCC
pp. 269-70, paras 16-17)
’16. There is inherent evidence in the wording of Section 28 and
34 to show that the framers of the Act intended to assure the
payment of interest to the person whose land was acquired and
it was not the intention to subject the said payment to
procedural hazards. Section 34 lays down that ‘the Collector
shall pay the amount awarded with interest at 6 per cent per
annum…’ The legislative mandate is clear. It is a directive to
the Collector to pay the interest in a given circumstances.
Section 34 nowhere says that the interest amount is to be
included in the award-decree as prepared under Section 23 (1)
read with Section 26 of the Act. Similarly Section 28 provides
‘the award of the court may direct that the Collector shall pay
interest’. Here also the award under Section 23(1) read with
Section 26 has been kept distinct from the payment of interest
under the section. The interest to be paid under Section 34 and
10also under Section 28 is of different character than the
compensation amount under Section 23 (1) of the Act. Whereas
the interest, if payable under the Act, can be claimed at any
stage of the proceedings under the Act, the amount of
compensation under Section 23 (1) which is an award-decree
under Section 26, is subject to the rules of procedure and
limitation. The rules of procedure are handmaiden of justice.
The procedural hassle cannot come in the way of substantive
rights of citizens under the Act.
17. We do not, therefore, agree with the reasoning and the
findings reached by the High court. We are of the opinion that
it was not necessary for the appellant claimant to have filed
separate appeal/cross-objections before the High Court for the
purposes of claiming interest under Section 28 or Section 34 of
the Act. He could claim the interest in the State appeal. The
fact, that he filed cross-objections which were dismissed as
time-bared, is wholly irrelevant.’
17. Having regard to the submissions urged on behalf of the
respondents we could have remitted the matter to the High Court to
give an opportunity to the claimants to make a claim of interest
before the High Court. That however, would only be a formality
because having regard to the law laid down in sunder, the High Court
is bound to award the interest on the additional amount payable
under Section 23 (1-A) and solatium payable under Section 23 (2) of
the Act. Moreover, grant of interest on these amounts is consequential
and automatic and involves only arithmetical calculation and not
11application of judicial mind or exercise of judicial discretion. It is no
doubt true that the appellants ought to have made such a claim before
the High Court, even in the appeals preferred by the state. But in
fairness to the appellants it must be conceded that during the
pendency of the appeals before the High court the law as laid down in
Prem Nath Kapur held the field and, therefore, it would have been
futile for them to claim interest. The claimants could have filed such
an application before the High Court if the judgment in sunder was
pronounced when the appeals were pending before the High court.
Unfortunately, they could not do so because the judgment in sunder
and the impugned judgment in the appeals preferred by the State
before the High Court were pronounced on the same day. Having
regard to these facts, peculiar to this case, we are persuaded to allow
the appeals preferred by the appellants as a special case in the
interest of justice. Accordingly, we hold that the appellants are
entitled to interest on the amounts payable to them under Section 23
(1-A) and Section 23 (2) of the Land Acquisition Act. We direct the
Collector to calculate the interest payable and pay the same to the
appellants without further delay. These appeals are accordingly
allowed. No order as to costs.”
The decision rendered by the Apex Court in Tahera Khotoon & Ors.
vs. Revenue Divisional officers/ Land Acquisition Officer &Ors.,
reported in (2014) 13 SCC 613 is in relation to a rent compensation and
the facts involved in the said report is somewhat similar to the present one.
In the said report the possession of the land was taken on 01. 01. 1938 for
development of the land into a park. Subsequently a notification under
12
Section 4 was issued by the State Government on 14.01.1996 followed by a
declaration under Section 6 of the Land Acquisition Act. The reference
under Section 18 of the said Act was made to a Land Acquisition Court and
ultimately the matter reached to the Supreme Court. The point which fell
for consideration in the said report was whether the appellants therein are
entitled to rent compensation or damages from the date they were
dispossessed till the date of notification under Section 4 of the Said Act.
Taking into account the development surrounding the said acquired land
and the fact that the possession was taken much before the date of
notification, the Apex Court held that the 15 per cent interests on the
compensation so awarded is reasonable and rational in the following:
“15. It is also not in dispute that the Municipal Committee was in
possession of the aforesaid property right from 1-1-1938 till the
Notification was issued by the State Government on 10-1-1996.
Keeping in view the observations made by this Court in Madishetti
Bala Ramul, we direct the State Government to pay rents/damages at
the rate of 15% on the compensation awarded from the date the
landowners were dispossessed, namely, from 1-1-1996. The
calculations shall be made by the State Government as expeditiously
as possible and disburse the aforesaid amount to the appellants as
early as possible, at any possible, at any rate, within three months
from the date of receipt of copy of this order.”
The ratio in Tahera Khotoon (supra) judgment was further
reiterated in a subsequent decision of the Supreme Court in case of Balwan
13
Singh &Ors. vs. Land Acquisition Collector & Anr., reported in (2016)
13 SCC 412 in the following:
“2. Noticing the above position, this Court in Madishetti BalaRamul v.
Land Acquisition Officer took the view that it may not be proper to
remand the matter to the Collector to determine the amount of
compensation to which the appellants therein would be entitled for
the period during which they remained out of possession and hence, in
the interest of justice, this Court directed that additional interest @
15% p.a. on the amount awarded by the Land Acquisition Collector,
shall be paid for the period between the date of dispossession and the
date of notification under Section 4 (1) of the Act.”
In Mandal Revenue Officer & Anr. vs. C.R. Bhagwanth Rao &
Ors., reported in (2005) 10 SCC 478, the large tract of land was acquired
for providing house site to Scheduled Castes members on the basis of a
notification issued under Section 4 (1) of the Land Acquisition Act, 1894
duly published on 17.11.1977. The Land Acquisition Collector passed an
award fixing the market price per Sq. Yard after deducting 1/3rd of the
amount spent for development activities. The land owners/claimants
claimed for reference under Section 18 of the said Act which ultimately
reached to the Court and the compensation was determined taking into
account the post notification sale instances. It was further argued that the
reliance upon an agreement for sale which is of close proximity in time is per
se illegal. It was thus held:
“5. Having considered the submissions made on behalf of the parties,
we are satisfied that the High Court was right and justified in fixing
14the compensation @ Rs 170 per square yard. In doing so, the High
Court has, as is clear from the impugned order, considered in detail,
both documentary and the oral evidence. It has also taken note of the
admission made by the witness RW 1 examined on behalf of the
appellants. RW 1, in his evidence, has stated that the value of the
acquired lands was between Rs. 150 and Rs. 200 per square yard at
the relevant point of time. Learned counsel for the appellants pointed
out that RW 1 was not the Land Acquisition Officer; he was only a
Junior Assistant in the District Supply Office. May be, the appellants
cannot disown his statement having examined on their behalf. It is
also not disputed that the lands acquired had potential value,
including the development of commercial complex and they are
abutting 100 ft road. As regards the contentions made by the learned
counsel for the appellants in respect of Exhibits A-6 and A-7 that they
ought not to have been relied upon by the High Court, it may be stated
that those agreements were on a stamp paper and the witness had
also been examined in respect of the same and either on their
genuineness or on the consideration mentioned therein, there was no
cross-examination on behalf of the appellants. Even there was no
suggestion otherwise. Under the circumstances, the High court rightly
accepted and acted upon those documents coupled with other
documents on record. Since the High Court has recorded a fining of
fact as to the market value of the lands, based on the evidence, we do
not find any good ground or valid reason to take a different view. As
regards the contention based on Section 25 of the Act, we may say
that this ground having not been urged before the High Court, not
raised in the special leave petition, although it is raised subsequently
15in the rejoinder-affidavit, cannot be permitted to be urged before us for
the first time because it requires some verification of facts and
records. We may also state here that the respondent claimants are
entitled to all the statutory benefits as are available to them on the
amount of compensation, as determined by the High Court. ”
In Jawajee Nagnatham (supra) the High Court discarded the post-
notification sale deeds as a reliable piece of evidence in absence of any
cogent evidence on the genuinity of the sales and the similarity of the lands
so acquired with the land covered under the said sale transactions. The
Apex Court held that in order to determine the market value of the land as
on the date of the notification broadly three factors are to be considered
namely,
1. Opinion of experts;
2. Price paid within a reasonable time in bona fide transactions of
purchase of lands acquired or the lands adjacent to the lands
acquired and possessing similar advantages; and
3. A number of years purchased of the actual or immediate prospective
profits of the land acquired.
Even holding so the Apex Court expressed in unequivocal term that
the second method of valuation is to be considered as the best method and
in the event, it is available from the record no illegality or infirmity can be
seen therefrom in the following:
“Therefore, it is settled law that in determining the market value,
the Court has to take into account either one or the other three
methods to determine market value of the lands appropriate on the
16facts of a given case to determine the market value. Generally the
second method of valuation is accepted as the best.”
However, in a subsequent judgment rendered in case of Trishala
Jain & Anr. Vs. State of Uttaranchal & Anr., reported in (2011) 6 SCC
47, the Supreme Court succinctly held that there is no impediment on the
part of the Reference Court to apply some guesswork in arriving at the final
determination which must be inconsonance with the statutory law and the
principles laid down in a catena of decisions, in the following:
“63. Under the Act, as settled by various judgments of this Court,
there are different methods of computation of compensation payable to
the claimants, for example it can be based upon comparable sale
instances, awards and judgments relating to the similar or comparable
lands, method or averages, yearly yields with reference to the revenue
earned by the land, etc. Whatever method of determining the
compensation is applied by the court, its result should always be
reasonable, just and fair as that is the purpose sought to be achieved
under the scheme of the Act. For attaining that purpose, application of
some guesswork may be necessary but this principle would have hardly
any application in a case of no evidence. In other words, where the
parties have not brought on record any evidence, then the court will
not be in a position to award compensation merely on the basis of
imagination, conjecture, etc.
64. These precedents clearly demonstrate that the court may
apply some guesswork before it could arrive at a final determination,
which is in consonance with the statutory law as well as the principles
stated in the judicial pronouncements. As already noticed, the
17guesswork has to be used for determination of compensation with
greater element of caution and the principle of guesstimation will have
no application to the case of “no evidence”. This principle is only
intended to bridge the gap between the calculated compensation and
the actual compensation that the claimants may be entitled to receive
as per the facts of a given case to meet the ends of justice.
65. It will be appropriate for us to state certain principles
controlling the application of “guesstimate”:
(a) Wherever the evidence produced by the parties is not
sufficient to determine the compensation with exactitude, this
principle can be resorted to.
(b) Discretion of the court in applying guesswork to the facts of a
given case is not unfettered but has to be reasonable and should
have a connection to the data on record produced by the parties
by way of evidence. Further, this entire exercise has to be within
the limitations specified under Sections 23 and 24 of the Act and
cannot be made in detriment thereto.
66. Applying these principles to the facts of the present case, we
have to take recourse to the “principle of guesstimation” inasmuch as
it is essential for fixation of fair market value of the land which shall be
the basis for determining the compensation payable to the claimants.
Now, we will discuss the evidence led by the parties in that behalf.”
In Mehrawal Khewaji Trust (Registered) Faridkot & Ors. vs. State
of Punjab & Ors., reported in (2012) 5 SCC 432, the Apex Court held that
a person is entitled to the highest value of his land if the sale deed so relied
upon in respect of a comparable land has similar advantages and
18
disadvantages and there is no fetter on the part of the Court in taking into
account the annual increase in the price of the land in the following:
“17. It is clear that when there are several exemplars with
reference to similar lands, it is the general rule that the highest of the
exemplars, if it is satisfied that it is a bona fide transaction, has to be
considered and accepted. When the land is being compulsorily taken
away from a person, he is entitled to the highest value which similar
land in the locality is shown to have fetched in a bona fide transaction
entered into between a willing purchaser and a willing seller near about
the time of the acquisition. In our view, it seems to be only fair that
where sale deeds pertaining to different transactions are relied on
behalf of the government, the transaction representing the highest
value should be preferred to the rest unless there are strong
circumstances justifying a different course. It is not desirable to take
an average of various sale deeds placed before the authority/court for
fixing fair compensation.
18. Based on the above principles, the market value as per Ext. A-
61 dated 22-7-1977 was Rs. 1,39,130.40 per acre (approx. Rs 1.40 lakhs
per acre). The said sale deed was two-and-a-half years prior in time than
Section 4 (1) Notification dated 22-12-1979. There is no reason to
eschew the above sale transaction. It is also pointed out that the lands
covered under Ext. A-61 are nearer to the lands of the appellants under
acquisition.
19. This Court has time and again granted 10% to 15% increase
per annum. In Ranjit Singh v. UT of Chandigarh this Court applied the
rule of 10% yearly increase for award of higher compensation. In DDA
v. Bali Ram Sharma this Court considered a batch of appeals and
19applied the rule of annual increase for grant of higher compensation. In
ONGC Ltd. v. Rameshbhai Jivanbhai Patel this Court held that where
the acquired land is in urban/semi-urban areas, increase can be to the
tune of 10% to 15% per annum and if the acquired land is situated in
rural areas, increase can be between 5% to 7.5% per annum. In Union
of India v. Harpat Singh, this Court applied the rule of 10% increase per
annum.
20. Based on the above principle, we fix the annual increase at
12% per annum and with that rate of increase, the market value of the
appellants’ land would come to Rs 1.82,000 per acre as on the date of
notification.
22. In Trishala Jain v. State of Uttaranchal this Court has held
that the value of sale of small pieces of land can be taken into
consideration for determining the value of large tract of land but with a
rider that the Court while taking such instances into consideration has
to make a reasonable deduction keeping in view of other attendant
circumstances. Similar view has been expressed in State of M. P. v.
Kashiram and Prabhakar Raghunath Patil v. State of Maharashtra.”
In K. Posayya & Ors. vs. Special Tahsildar, reported in (1995) 5
SCC 233, the Apex Court has held that the market value should be
determined on the basis of sound discretion as opposed to the feats of
imagination or flight of fancy in the following:
“6. It is settled law that market value is to be determined either
on the basis of the prevailing prices of sale and purchase between
willing vendor and willing vendee or value of the crops realised applying
suitable 10 years’ multiplier or in case of land valued by expert valuer
20like urban properties could be considered for determination of the
compensation. Market value cannot be fixed with mathematical
precision but must be based on sound discretion exercised by the
reference court in arriving at a just and reasonable price. It should not
be based on feats of imagination or flight of fancy. Determination of
compensation for compulsory acquisition involves consideration of the
price which a hypothetical willing purchaser can be expected to pay for
the lands in the existing use as well as relatable potentialities. The
acid test is the arm chair of the willing vendor would offer and a
prudent willing buyer, taking all relevant prevailing conditions of the
normal market, fertility of the land, location, suitability of the purpose
for which it was purchased, its existing potentialities and likely use to
which the land is capable of being put in the same condition would,
offer to pay the price, as on the date of the notification. In case of
acquisition of large tracts of lands for projects situated in several
villages, stray sale deed of small extent here and there would not form
the basis to determine the compensation. The reference court should
be circumspect, pragmatic and careful in analysing the evidence and
arriving at just and fair market value of the lands under acquisition
which could be fetched on the date of the notification. The nature of
the land, the crops raised and the nature of the income likely to be
derived from the lands, the expenditure to be incurred for raising the
crops and the net profits etc. would be the relevant factors in arriving
at the net market value and if evidence is produced in that behalf on its
basis applying the suitable 10 years’ multiplier, the market value need
to be determined. The owner or claimant should not be put to loss by
undervaluation. But, at the same time public exchequer should not be
21put to undue burden by excess valuation. It is the statutory duty of the
court to maintain the balance between diverse interests.”
The judgment delivered in case of State of West Bengal vs.
Kedarnath Rajgarhia Charit. Trust Estate, reported in (2004) 12 SCC
425, the point for consideration in the instant case was whether the
provisions contained under Section 23 (1A) of Land Acquisition Act, 1894
has any manner of applicability in relation to acquisition proceeding
initiated under Act II of 1948. In answering the same the Apex Court held:
“6. As seen earlier in Section 7 the calculation of compensation
is to be made in the manner and in accordance with principles set out
in Section 23(1) of the Land Acquisition Act, 1894. Thus, this is not a
referential legislation which contained a reference to or the citation of
Section 23 (1) of the Land Acquisition Act, 1894. Section 7 merely
incorporates the manner in which compensation is to be worked out.
As per the principles set out in U.P. Avas Evam Vikas Parishad case any
subsequent amendment would therefore not be applicable, particularly
so when the amendment is not even in Section 23 (1). Thus, any
subsequent amendments in Section 23 would not be applicable and
cannot be read in Section 7.
7. It must also be mentioned that by an amendment of 1996, Section 7
has been amended and Section 23 (1-A) has been incorporated with effect
from 1-4-1994. This also shows that earlier to this date, the provisions of
Section 23 (1-A) were not applicable to an acquisition under the West Bengal
(Requisition and Acquisition) Act, 1948.”
In CESC Ltd. vs. Sandhya Rani Barik & Ors., reported in (2008)
17 SCC 436, the Apex Court adopted the doctrine of armchair in assessing
22
the value of the land as it cannot be decided with mathematical precision. It
is held that the various factors namely, the largeness of the land, other
surrounding advantages and disadvantages and the developments in around
the acquired land are to be taken into consideration in the following:
“19. The armchair assessment of land value has to proceed with
common sense and circumspection. One should attempt to find out the
just and reasonable compensation without attempting any
mathematical precision in that regard. For the purpose of assessing
compensation, the efforts should be to find out the price fixed for the
similar land in the vicinity.
20. The difference in the land acquired and the land sold might
take on various aspects. One plot of land might be larger, another
small, one plot of land might have a large frontage and another might
have none. There might be differences in land development and
location. There might be special features which have to be taken note
of and reasonably considered in the matter of assessing compensation.
21. Where a very large plot of land has been acquired and the
comparison is sought to be made with a comparatively smaller piece of
land which has been sold or otherwise dealt with, then in that event, a
percentage of the price is to be knocked off because of the largeness
itself of the acquired land. Accordingly, the High Court made the
deductions. The High Court also dealt with the question of land locking
and held that it was a special feature which had to be taken note of.
22. We do not find any infirmity in the approach of the High
court. Therefore, the rate fixed by the High court does not suffer from
infirmity. The appeals filed by the appellant CESC, therefore, stand
dismissed.
23
23. Rate fixed by the High Court as questioned in the cross-
appeals does not warrant interference. But there is substance in the
plea regarding rate of interest.
24. Section 7(2) (a) of the West Bengal Act is as follows:
“7. (2) (a) When the compensation has been determined under
sub-section (1) the Collector shall make an award in accordance
with the principles set out in Section 11 of the Land Acquisition
Act, 1894, and the amount referred to in sub-section (2) of
Section 23 of that Act shall also be included in the award:
Provided that interest at the rate of nine per centum per annum
on the amount of compensation under the award from the date of
the publication of the notice under sub-section (1-a) of Section 4
until payment shall be included in the amount payable under the
award:
Provided further that if such compensation or any part thereof is
not paid or deposited within a period of one year from the date of
publication of the notice under sub-section (1-a) of Section 4,
interest at the rate of fifteen per centum per annum shall be
payable from the date of expiry of the said period of one year on
the amount of compensation or part thereof which has not been
paid or deposited before the date of such expiry.””
On the cumulative effect of the ratio laid down in the above noted
decisions, the best way of determining the market value is on the basis of a
comparable sale deeds having similar and identical advantages or
disadvantages. There is no fetter on the part of the Court in relying on an
agreement for sale if it appears to be genuine and reflects the true market
price of the land in a close proximity of time. However, a safeguard is to be
24
adopted while relying an agreement for sale and the genuinity and the
authenticity should be proved by a cogent evidence. The appreciation and
depreciation of the value of the land is not impermissible provided it is
based upon the other reliable piece of evidence produced before the Court.
The doctrine of armchair or to some extent the guesswork may be permitted
but it should be based upon a sound logic or impeccable evidence adduced
by the parties. Even if Section 23 (1A) of the Land Acquisition Act, 1894
may not in a stricter sense applies yet Section 23 by way of a reference in
the another legislation is made applicable and therefore the Court taking
shelter under the aforesaid provision cannot be said to have acted contrary
to the statutory provisions. In the event of determining the rent
compensation as the land was requisitioned at prior period of time to an
acquisition under Act II of 1948, the Court must take into account the ratio
of the decisions rendered in this regard nor the authority can surreptitiously
jump to a numerical figure having no rational behind the same.
The present case being the case of unique nature where the Trial
Court records are not available and the decisions is required to be taken on
the basis of admitted documents, the discrepancy appears to have been
created in the judgment impugned in the instant appeal where the Reference
Court has used the expression “agreement for sale” and “sale deed” in
relation to Exhibit-1 and 1(a). However, in the finding portion of the
Judgment, the Reference Court has taken those Exhibits as a sale deeds
whereas in narrating the facts, it is shown as an agreement for sale. It is a
trite law that the recording of the findings made by the Court is sacrosanct
unless contradicted by a cogent evidence. Even if it is regarded as an
25
agreement for sale, the law as enunciated above does not put any absolute
fetter into the court in not relying the same for the purpose of ascertaining
the market value of the land. In the supplementary paper book the
deposition of the appellant was incorporated wherein the said witness have
categorically admitted that the said rate report was based upon the Premises
No. 14A, Beliaghata Main Road for which the sale was affected way back in
the year 1984. It is further admitted that the acquired land is a developed
land and is also surrounded by the developed land situated in the locality
having all amenities of modern life i.e., the underground sewerage, school,
college, market, supermarket, hospital, nursing home, cinema hall, lake etc.
in close vicinity. The said witness further deposed that the acquired land
has a wide frontage of 60 feet road and also have the back frontage of 20 feet
road. In the opinion of the said witness, the acquired land is fit for
construction of multi-storied building and further admitted that the distance
between the acquired land and the land which was taken into consideration
for the purpose of preparation of the rate report is around 4 kilometres. The
said witness further admitted that one of the exemplar relied upon by the
respondent in respect of a property is situated at one and half kilometre.
Such being the stand taken in the evidence adduced by the appellant
it is fallacious to suggest that the land situated at a distance of 4 kilometres
would be considered as the best comparable land than the land situated
within one and half kilometre.
As indicated hereinabove, apart from the rate report submitted by the
surveyor/valuer of the office of the Land Acquisition Collector and the
evidence adduced on behalf of the appellant, there is no record which is
26
available before this Court. However, this Court found from the impugned
judgment the reference of Exhibit 1 and 1(a) which is relied upon in order to
ascertain the market value of the land at the time of a notification for
acquisition. The evidence of a witness on behalf of the appellant is
meticulously taken into account and it would not be wrong to say that the
said witness admitted that the property involved in the aforesaid exhibits are
situated within one and a half kilometres from the acquired land whereas
the property relied upon by the surveyor of the Land Collectors Office as a
basis for determining the compensation is situated at the distance of 4
kilometre from the acquired land. Though there appears to be discrepancy
in the nature of the documents exhibited as 1 and 1(a) as to whether it is an
agreement for sale or a sale-deed itself but we do not find any fetter on the
part of the Court in relying on an agreement for sale provided the same is
genuine and having a similar advantages and disadvantages that of an
acquired land. The discrepancy can be effaced as the Trial Court treated
such exhibits as a sale-deed and in absence of any cogent evidence that it is
in fact an agreement for sale, the Court has to proceed on the sanctity of
such statement made by the Trial Court. It has been held in Jawajee
Nagnatham‘s case that the sale-deeds showing the price of the property
situated within the close proximity can be taken as a safest mode provided
such transaction appears to be a bona fide and genuine. Apart from the
same, in order to rely upon the sale-deeds of a nearby property, the Court
shall also bear in mind the advantages and disadvantages in comparison to
the land being the subject matter of the acquisition. In Trishala Jain &
Anr. (supra) the Apex Court was in fact facing the same situation as in the
27
instant case where the evidence adduced by the parties was not sufficient
and held that the discretion is vested upon the Court to apply a guesswork
provided it is reasonable and have some nexus with the data on record. We
are unable to accept the contention of the appellant that the Court should
rely upon a rate report submitted by the surveyor of the Land Acquisition
Collectors office as it was relied upon a property situated at a distance of 4
kilometres from the acquired land whereas the Exhibit 1 and 1(a) is
admittedly situated within one and a half kilometre. The aforesaid
exemplars indicate the prices per cottah as on April 30, 1993 at Rs. 6 lakh
53 thousand and on November 28, 1987 at Rs. 7 lakh 59 thousand per
cottahs. The Reference Court determined the market value at Rs. 2 lakh 50
thousand per cottah; the reasons do not appear to have been provided
therein. What appears to us from the impugned judgment that the reference
Court has taken the average of the market price per cottah on the basis of
the Exhibit 1 and 1(a) as well as the rate report which took into
consideration the sale effected on 7.1.1988 in respect of Premises no. 14A,
Beliaghata Road, Kolkata. As indicated above, the property which is situated
at a distance of 4 kilometres from the acquired property cannot be taken
into consideration for the purpose of determining the market price of an
acquired property, more particularly, when the property situated within one
and a half kilometre from the acquired land was sold indicating the price per
cottah. Furthermore, the surveyor relied upon a sale-deed dated 7.1.1988
whereas the said Exhibit 1(a) relates to a transaction of a property effected
on 28.11.1987 and 30.4.1993. We noticed a disparity in the sale price per
cottah in Exhibit 1 and 1(a). The Exhibit 1 revealed the sale price per cottah
28
at Rs. 7 lakh 59 thousand per cottah as on 28.11.1987; on the other hand,
Exhibit 1(a) indicates the sale price at Rs. 6 lakh 53 thousand per cottah as
on 30.4.1993. Ordinarily, the price of the land increases by a passage of
time and the decrease in the price after a gap of 5 years has to be
understood while comparing the price in the said exemplars. In order to
arrive at the genuinity or a true and correct market value of the land in the
vicinity, we are not unmindful of the fact that the owner of an adjoining land
may offer a higher price which may not be a real market price as the
advantages of purchasing adjoining land would be more beneficial to the
adjoining owner than an outsider. It would not be safe for or to take into
consideration the sale price shown in the Exhibit 1 but there is no fetter on
the part of the Court in taking into account the market price shown in
Exhibit 1(a) not only for the reason that it is in the close distance but also
having the same advantages and disadvantages that of the acquired land.
Averaging the price may not always be infirm but the Court must record the
reasons for the same. The property as relied upon by the surveyor was at a
distant place and it would not be proper on the part of the Trial Court to
take into account the same for the purpose of determining the average
market price of the land. It is evident from the record that the possession of
the land was taken under Act II of 1948 more than several decades before
the initiation of an acquisition proceeding and obviously developments have
been made thereupon to make suitable for the purpose for which the
possession was so taken. The property comprised in Exhibit 1(a) is
admittedly situated within 2¼ kilometres away from the acquired land, and,
therefore, the contention of the appellant that the rate report should be
29
taken into consideration which was based upon the sale price of 44A,
Beliaghata Main Road which is situated with the 4 kilometres away from the
acquired land cannot be accepted as a safe mode. Taking into account that
the development has been undertaken and the advantages and
disadvantages are similar to that of Exhibit 1(a), there is no fetter on the
part of the Court to discard certain amount on account of the development
while ascertaining the market price. Considering the aforesaid aspect, we
are of the view that the market price of the acquired land is at Rs. 4 lakhs
per cottah and, therefore, the impugned judgment is modified to such
extent.
The appeal and cross objections are accordingly disposed of.
The impugned judgment is modified to the extent that the market
price of the acquired land is fixed at Rs. 4 lakhs per cottahs. Other portion
of the order remained uninterfered with.
No order as to costs.
Urgent Photostat certified copies of this judgment, if applied for, be
made available to the parties subject to compliance with requisite
formalities.
(Harish Tandon, J.)
I agree.
(Prasenjit Biswas, J.)